BRAZIL - US: THE NUCLEAR FUEL ISSUE

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06820734
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 5
• Document Creation Date: March 9, 2023
• Document Release Date: September 18, 2020
• Case Number: F-2017-01987
• Publication Date: October 12, 1977

Approved for Release: 2020/09/11 C06820734
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CENTRAL INTELLIGENCE INTELLIGENCE AGENCY
National Foreign Assessment Center
12 October 1977
INTELLIGENCE MEMORANDUM
BRAZIL-US: THE NUCLEAR FUEL ISSUE
Summary
Brazilian leaders hope that President Carter will
personally reassure them when he goes to Brasilia next
month that the US will honor its agreement to provide
the nuclear fuel needed to complete construction of
their first nuclear power plant. A decision to post-
pone or cancel the shipment before the President's
trip would jeopardize the visit and cause a further
deterioration in bilateral relations.
While Brasilia is firmly committed to completion
of three nuclear power plants--two German and one US--
and the enrichment and reprocessing facilities, there
is growing disagreement within official circles con-
cerning the real need for accelerated development of
nuclear power. Indeed, uncertainties concerning eco-
nomic viability will probably cause Brazil to stretch
out and scale down its nuclear program significantly.
This memorandum was prepared by the Office of
Regional and Political Analysis and was coordinated
by the Office of Economic Research, Office of Scientific
Intelligence, and the Clandestine S'envioeq Otieq*innq
and comments may be addressed
RP M 77-10267
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Political
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Political Concern
Brazilian leaders are showing increased concern
that the US will break its contractual commitment to ex-
port enriched uranium to Brazil by mid-December to fuel
the nuclear power plant being built by Westinghouse. A
US decision to deny start-up fuel for the reactor would
do serious damage to US-Brazilian relations.
Having purchased the uranium in South Africa and
shipped it to the US for enrichment in compliance with
the terms of a 1972 agreement, the Brazilians could be
expected to launch a media campaign accusing the US of
failing to honor its commitments. They would probably
demand full compensation for the "stolen uranium," and
possibly even consider seizing US property in Brazil in
retaliation.
The Geisel government has already indicated that it
would interpret the withholding of the uranium as nuclear
blackmail. Future military administrations probably would
also exploit nationalistic anti-US sentiment by taking a
more vigorous approach to establishing indigenous reprocess-
ing and enrichment facilities.
the nuclear (b)(1)
fuel issue was a key factor in Brazil's recent decision (b)(3)
to renounce its remaining military accords with the US.
These accords had facilitated frequent and close con-
sultations on security matters since World War II.
President Carter's decision to visit Brasilia in
November gives the fuel issue additional importance.
Any indication before the trip that the US plans to
further delay or to deny export of enriched uranium might
well lead to an abrupt decision by the Brazilian govern-
ment to withdraw its invitation. If no announcement is
forthcoming, President Geisel and Foreign Minister Silveira
will press for reassurances regarding the fuel during the
visit and expect to get them.
(b)(1)
(b)(3)
-2-
-SECRET-
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In
-
In any event, President Geisel will be politically
committed to a frank discussion with President Carter of
what he and other Brazilians see as continuing US efforts
to prevent their obtaining sensitive nuclear technology.
During the past year the acquisition of a full nuclear
fuel cycle has become one of the highest priority object-
ives of the Geisel government.
Nuclear Energy
Geisel has already given clear evidence that he is
not willing to make any concessions to the US that could
be interpreted as impeding Brazil's efforts to become
self-sufficient in nuclear energy. The next several months
will be especially tense ones for him politically, as he
and other members of the military high command decide who
will be the next president of Brazil.
Brasilia's economic rationale for developing nuclear
energy is the high cost of Brazil's dependence on imported
oil to satisfy its current energy requirements. Imported
fuel accounts for nearly 30 percent of Brazil's total im-
port bill and has been the largest single component of its
huge current accounts deficits in recent years. Brazil
now imports over 80 percent of its petroleum. Hydroelectric
power is not yet fully developed, but it will be by the
close of the century.
-3-
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SECRET
Brazilian leaders currently believe they are laying
the foundation for a nuclear industry to meet future
electric power needs and to supplement hydro-electric
development, which will become increasingly expensive
after 1990 when potential near the main consumption cen-
ters approaches full development. The large investments
needed to establish a complete nuclear fuel cycle may
strain Brazil's balance-of-payments situation for the
next decade or so in the interest of reducing dependence
on imported oil and imports of enriched uranium by the
turn of the century. It is possible, moreover, that
future Brazilian administrations may realize that the
substantial capital investment required by the nuclear
program would be more productively channeled into acceler-
ated 411) hydro-electric development or export promotion.
The Treaty with West Germany
President Geisel and Foreign Minister Silveira have
staked their political reputations on implementing the
accord they negotiated with West Germany two years ago
regarding the transfer of nuclear technology. Yet, some
believe
will force significant modifica-
tions in the agreement.
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-grEeRsur--
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The completion completion dates for
the first two reactors to be built by West Germany have
already slipped a few years, and major construction
problems will probably lead to further delays.
The agreement fully commits Brazil only to the pur-
chase of two power plants from West Germany. If serious
foreign exchange constraints persist, it will be difficult
for future administrations to justify the purchase of the
additional six German reactors originally contemplated
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